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Watchdog group doubles down on Circle-Tron cash laundering claims

15 Dec 2023
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Nonprofit ethics group Marketing campaign for Accountability (CfA) has doubled down on its cash laundering claims towards Circle, publishing a brand new open letter on Dec. 14 claiming that the USD Coin (USDC) issuer is facilitating the funding of terrorist organizations.

The CfA originally made these claims on Nov. 9 in a letter to United States Senators Elizabeth Warren and Sherrod Brown. Circle responded to the claims on Nov. 11, claiming the allegations had been primarily based on uncorroborated, unverified social media posts.

The brand new letter was additionally addressed to the 2 U.S. senators and was signed by CfA government director Michelle Kuppersmith. Within the new letter, Kuppersmith took purpose at Circle’s Cross Chain Switch Protocol (CCTP), a blockchain protocol that permits customers to switch USDC between a number of networks, together with Tron.

“Circle’s latest employment of its Cross-Chain Switch Protocol could also be used to facilitate what seems to be the quickest rising car for illicit finance within the digital asset house,” the letter acknowledged. It claimed that facilitating transfers to Tron is problematic as a result of the community “has been named in a number of regulation enforcement actions involving billions of {dollars} in transactions by alleged organized crime teams and sanctioned entities.” Tron founder Justin Solar denied allegations of money laundering in 2019.

Associated: Circle launches cross-chain USDC transfer protocol for Ethereum, Avalanche

Kuppersmith additionally claimed that Circle has admitted to “banking” Justin Solar. “Somewhat than addressing the specifics of its relationship with Mr. Solar, [Circle head of public policy] Mr. Disparte wrote merely that Circle now not ‘banks’ Justin Solar,” the letter mentioned.

Per Kuppersmith, this means that “Circle maintained a direct buyer relationship with Mr. Solar, one thing we weren’t beforehand conscious of.” In Circle’s Nov. 11 rebuttal to the CfA, Disparte acknowledged that “Circle terminated all accounts held by Mr. Solar and his affiliated corporations in February 2023.”

The CfA claimed that new proof has emerged towards Tron just lately. Quoting Reuters, the letter acknowledged that “Tron has overtaken its rival as a platform for crypto transfers related to teams designated as terror organizations by Israel, the US and different international locations.” The Reuters article cited “interviews with seven monetary crime consultants and blockchain investigations specialists” as proof for this declare.

Other than the Nov. 11 letter, Circle declined to remark additional on the matter when contacted by Cointelegraph. 

Claims about crypto terrorism financing have come to the forefront because the Israeli-Hamas battle broke out on Oct. 7. In October, blockchain analytics platform Elliptic claimed that Tron’s SunSwap protocol had develop into some of the fashionable means of cash laundering for terrorist teams. Nevertheless, after a number of media retailers started citing the report, Elliptic claimed that these retailers were exaggerating the value of those transactions.